• FT article on China buying European bail-out bonds helps trigger stops in EUR
  • Similar article on China investing NZD$6 billion in New Zealand sees NZD rally strongly
  • Regional stockmarkets rally by over 1%
  • Oil and Silver rally also, fuelling USD selling
  • Australian Q1 new CapEx +3.4%
  • UK economy: CBI survey shows mixed results

It’s all been about short covering in the EUR and it was an FT article on China buying bail-out bonds which set off the short squeeze. This was not ‘new’ news but the market had forgotten it in their fervour to sell the EUR over the last few weeks. Trailing stops were triggered above 1.4135 and the EUR rallied across the board on short covering. ACBs slowed bullish progress, selling into the rally near 1.4160. Ranges: EUR/USD 1.4065/1.4175, EUR/CHF 1.2270/1.2349

The NZD has also been to the fore today as talk of major Chinese investments triggered stops in NZD/USD above .8000 and in AUD/NZD below 1.3160.

AUD/USD rallied alongside the EUR/USD and also got a boost from the better-than-expected capital expenditure data. AUD/NZD selling weighed at times and decent offers near 1.0590/00 also slowed down the short covering. Ranges: 1.0505/1.0603

USD/JPY was yet again caught in the middle of a generally bearish USD sentiment yet bullish sentiment on JPY crosses. This of course led to more range trading. Ranges: USD/JPY 81.77/82.16, EUR/JPY 15.36/116.03

Cable triggered stops above 1.6310 and 1.6325 but short covering in EUR/GBP helped slow the rise. Ranges: Cable 1.6270/1.6334, EUR/GBP .8638/80

USD/CHF .8703/34